Multiple choice

If $P = Rs. 1,000, R = 5$% p.a., $n = 4$. What is the amount earned after interest? Also state the value of the compound interest earned.

  1. $Rs. 1,215.50$ and $Rs. 215.50$
  2. $Rs. 1,125$ and $Rs. 125$
  3. $Rs. 2,115$ and $Rs. 115$

  4. None of above
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A Correct answer
AI explanation

Using the compound interest formula, the final amount equals 1,000 times 1 plus 5 divided by 100 raised to the power of 4, which is Rs. 1,215.50. The compound interest earned is the final amount minus the principal, so 1,215.50 minus 1,000 equals Rs. 215.50.

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